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Strategy & Performance Management In Healthcare: An In-Depth Case Study Of Folkhälsan

See how one healthcare organization put the Balanced Scorecard to work for them—and saw real strategic planning results you can emulate.

Ted, Founder and Managing Partner at ClearPoint, has over 25 years of experience working with organizations to improve their performance management and strategy execution processes.

Over a decade ago, Folkhälsan—a healthcare nonprofit based in Finland—recognized the need for an integrated strategy and improved performance management. Monica Niemi is Folkhälsan’s development manager and played an integral role in the creation of the organization’s Department of Strategy Management. Monica shared with us a little about life at Folkhälsan before the Balanced Scorecard, the difficulties and successes the nonprofit has had with strategic planning, the unique challenges a healthcare organization may face when handling performance management, and best practices you can put in place for your scorecard rollout.

About Folkhälsan

Folkhälsan, a nongovernmental organization in the social and healthcare sector, was founded in 1921. Today, Folkhälsan has approximately 1,500 employees and 19,000 members in its local association.

The organization has five primary divisions:

  • Folkhälsan Foundation: This division has the responsibility of coordinating operations for the entire organization, including asset management, construction projects, development work, staff administration, property management, and IT functions.
  • Folkhälsan Sports Education: This division includes sport leaders, massage therapists, personal trainers, and more.
  • Folkhälsan Association:  This division is in charge of Folkhälsan’s professional health promotion work. The association is funded by the Folkhälsan Foundation and the Finnish Slot Machine Association.
  • Research centers: Folkhälsan has three research programs headed by world-famous senior researchers at assistant professor and professor levels: genetics, public health, and preventive medicine.
  • Service production and nonprofit companies: These companies sell services mainly to municipalities but also to private individuals.

The infographic below shows how Folkhälsan finances its activities:

Strategy & Performance Management In Healthcare: An In-Depth Case Study Of Folkhälsan

Beginning The Strategy Planning Process

When did Folkhälsan begin thinking seriously about strategic planning?

Folkhälsan has always been developing new models and practices for health promotion. But in 2003, we experienced a reorganization inside the organization and knew we needed to focus on our internal structure and organization. I came on board as the developement manager at that time and worked with the team to align our strategy. We developed what we would loosely refer to as our “management system.” The first framework we adopted to clarify our mission, values, and vision was the European Foundation for Quality Management (EFQM) methodology.

In early 2004, the Balanced Scorecard was presented for the first time in the executive management group. However, Folkhälsan is a nonprofit, and we were under the impression that the Balanced Scorecard was only effective in for-profit businesses—so we didn’t integrate it for a while. Finally, in late 2004, we adopted the Balanced Scorecard throughout the organization. Referred to internally as our “map and compass,” our scorecard helped us drive strategic change, see continuous process improvement, and enhance our employees’ understanding of and buy-in to these management approaches.

Strategy & Performance Management In Healthcare: An In-Depth Case Study Of Folkhälsan

If you’re ready to create a Balanced Scorecard that supports your healthcare strategy, we’re here to help.

Difficulties & Successes

Was it difficult to get started with strategic planning?

It certainly wasn’t easy to get started with strategic planning, but it was absolutely worth it. We implemented the Balanced Scorecard as we were growing and facing a number of internal and external changes, so having a framework or model for our strategy became critical. Not everyone in the organization was happy about it at first, but many bought into the idea and recognized that it was the necessary to help with strategic changes in the organization.

We faced a number of “growing pains” at the beginning of this process:

  • Many employees were not aware of the company’s priorities.
  • There was a general lack of understanding between the lines of our operations.
  • Common organizational objectives were unclear.
  • Our strategic objectives were not clearly linked to our annual budget.
  • Reporting was slow and infrequent.

We were lucky to have an ambitious group of employees who wanted to deliver high-quality work. But in order to do that, they needed to know what objectives the company was focused on and how those objectives played into the long-term strategy. The Balanced Scorecard helped us achieve those goals and answer those questions.

What were some of Folkhälsan’s keys to strategic success?

  • We had a passion for strategy and performance management. We also became more knowledgeable on the subject as time went on.
  • My boss believed in me as the development manager for strategy management from the very beginning.
  • The executive management group was involved from the beginning. They acted as the steering committee for the management system and weren’t afraid to roll up their sleeves and do some of the heavy lifting.
  • We had support from the chairman of the board, who wrote a very supportive article about our management system and the use of the Balanced Scorecard in our personnel newsletter.
  • Strategic development took place throughout the organization. In 2004, we established the Office of Strategic Management. This was an internal network comprised of department heads who were passionate and knowledgeable about both strategy and performance. This helped us a great deal with departmental buy-in and is extremely important to our success today.
  • We worked with an excellent external consultant during our first year with the Balanced Scorecard. I was familiar with the theory behind the Balanced Scorecard, but I was less familiar with putting it into practice. Our consultant helped us get on the right track and stay there.

Did you deal with resistance or pushback? How did you get everyone involved in strategy management?

We did deal with resistance and pushback from some individuals across the organization—but another key to our success was that we didn’t give into this resistance. Fortunately, we had a core group of individuals who felt strongly about our efforts in strategy and performance management, and they helped us convince the naysayers in the long run.

Another reason we were able to get everyone on board was because of the executive management team’s level of involvement. They helped us greatly with departmental buy-in. The management in each department selected someone interested in strategy to be a part of the performance management initiative. This group of people throughout the company would meet a few times a year—either online or in a meeting. This kept every department on the same page without overwhelming anyone.

Ongoing Scorecard & Strategy Management

How frequently do you refresh your scorecard, and who drives that process?

When we got started with our scorecard, we had a yearly refresh connected to the budgeting process. But today, the process of refreshing is more fluid. It’s critical to have objectives in your Balanced Scorecard, but you must keep in mind that how you achieve those goals will change regularly, and you need to be flexible enough to accommodate for that.

The scorecard refreshing process is driven by the management groups in every subunit, department, and association. If need be, these departments get support from the Office of Strategy Management. As the development manager at the organizational level, I meet with the individual management groups every year to review these changes. In 2007, we introduced an IT tool to help us manage and refresh our scorecard, which has been helpful in the refresh process.

Even though this process is driven by the management groups in each department, everyone needs to get “hands on” to understand their stake in the scorecard and what their departmental objectives mean on an organizational level.

How do you balance operational measures with health outcomes?

We get the “balance” from the Balanced Scorecard! Our measures are varied across all four scorecard perspectives. Some of those measures include:

  • IMAGE Survey
  • Great Place To Work Finland
  • Customer Feedback
  • Financial Reports
  • Self-Assessment
  • External Auditing
  • Number Of Members
  • Number Of Research Publications
  • Number Of Doctoral Theses
  • Quality Improvement (A resident assessment instrument.)
  • Demands Of Care (Folkhälsan compared to other nursing homes in Finland.)

Are you tracking the most important healthcare metrics and KPIs?

We believe that every organization should look at measures and initiatives as a whole. Our action plans developed after examining our measure results, and these plans have clear responsibilities and deadlines.

Strategy & Performance Management In Healthcare

What makes the Balanced Scorecard important for the healthcare sector?

  • It helps you get visible results. Our efforts in strategy and performance management have certainly paid off. In fact, in 2010, we were accepted into the Palladium Balanced Scorecard Hall of Fame. And in 2016, we broke our own record in Finland’s Great Place To Work competition.  
  • It helps support your employees and your patients. For example, Folkhälsan’s manager in the elderly care sector, Kira Exell-Paakki, describes how the Balanced Scorecard has been critical: “Systematic measurements [from the Balanced Scorecard] give me as the manager a complete picture of the service we provide. Management monitors the documentation of measurement results and communicates clearly to the staff that the results are used for development.”
  • It is a great tool for communication and dialogue. It’s important to “sell” the idea of a Balanced Scorecard throughout your organization so employees know why it’s critical and what it means in their job.
  • It helps foster a better connection between your strategy, budget, and standard of care. Healthcare is changing around the world, and we are constantly thinking of how to better allocate our resources while still maintaining an excellent standard of care. I have worked as a nurse and know that it is easy to put all the focus on whether we are taking good care of people. But the scorecard framework is balanced, so it allows you to keep both high-quality care and cost effectiveness in mind.

What is your advice for a healthcare organization looking to implement a Balanced Scorecard?

If I had to narrow it down to three simple things, I would say:

  1. Learn the basics—like the theory and model—of the Balanced Scorecard.
  2. Adapt and apply these basics to fit your organizational needs.
  3. Use your scorecard and live it out in your organization.

But there are a number of best practices I would suggest anyone in the healthcare sector keeps in mind:

  • Make sure you have people in your organization with passion and knowledge for strategic development work.
  • Get buy-in at the top. Your leadership must be convinced that whatever framework you use is the right model, and then they must “live it” by using it regularly and communicating in terms of that system.
  • Take as many people with you at the beginning as possible. In other words, get as much buy-in as you can at the beginning of the process, and keep an open dialogue about any issues or concerns that arise.
  • Put a system in place for follow-up, as that will continue to drive results.
  • Be prepared to work hard over a long time, and don’t give in! This applies to everyone—not just leadership.
  • Communicate, communicate, communicate. Focus on why your strategic performance is critical! The best reward is when someone in the organization tells me they use the scorecard every day and can’t live without it—but I’m also prepared to hear negative feedback and work through it accordingly.
  • Take into account person-centered care. Get away from the problem-focused approach and consider strengths, resources possibilities, and well-being (of both employees and patients) in every perspective.
  • Listen, listen, listen. I’ve recently become very interested in business coaching and feel strongly that the “with you” coaching approach is important for any team leader. Instead of telling people what they need, ask them, and consider how they can use the strategic models in their day-to-day work.

A huge thanks to Monica Niemi of Folkhälsan for sharing her insights with us!